Tracking Happiness and age

Happiness,
those surveys show, follow a generalized U-shape over the course of a life: People report high degrees of happiness in their late teens and early 20s. But as the years roll by, people become more and more miserable, hitting a nadir in life satisfaction sometime
around the early 50s. Happiness rebounds from thereinto old age and retirement.

The shape of the curves, rather than any absolute value, are what's important here. The surveys asked about happiness in different
ways — some framed it in terms of “satisfaction,” while others asked people to rate where they fell between “happy” and “unhappy.” So the absolute values of each line aren't directly comparable.

Two
things stand out: First, the curves all follow the same general U-shaped trajectory. Youth and old age are periods of relative happiness, while middle age is something of a rock bottom. Second, they generally agree that the bottom of that U hits
some time in the early 50s.

These similarities are even more remarkable given the differences in the underlying surveys, which were administered in different countries. They include the General Social Survey (54,000 American respondents), the
European Social Survey (316,000 respondents in 32 European countries), the Understanding Society survey (416,000 respondents in Great Britain) and others.

Note that rock bottom in the chart above doesn't denote absolute misery — people in their 50s still generally rate their life satisfaction
in the mid-to-high range, a seven out of 10, for instance, or a 3.5 out of five. But that's substantially and significantly lower than how people in their late teens or early 20s rate their happiness. The difference between the two — happiness at
youth and happiness at middle age — is roughly equivalent to the decline in well-being caused by getting divorced or losing a job, according to the analysis.

These trend
lines are all adjusted for other factors known to affect happiness and life satisfaction, like income and health.

“There is much evidence,” the paper's authors conclude, “that humans experience a midlife psychological 'low.'" The
exact causes of this aren't entirely clear. One common explanation is that in wealthy countries like ours, middle age is a particularly stressful time. People
in their late 40s and early 50s are often at the peak of their careers (will all the headaches that entails), and many are dealing with unruly adolescent children to boot.

There's also some disagreement about the universality of the U-shaped happiness
curve. Researchers who have teased out country-level trends have found different variations
on the curve, particularly among less wealthy nations. Other researchers have examined longitudinal data, which tracks the same individuals over time, and found evidence for flat or wavy
happiness trajectories throughout a lifetime.

Still, the authors of this working paper argue that the evidence they've mustered is strong enough that “these kinds of plots of happiness and life satisfaction should be shown — with a

Can you meausure your Happiness level with a Smartphone?

One of the more important challenges of 21st-century living is figuring out how to be happy.
There is no shortage of advice. Aristotle wrote that “happiness is a state of activity.” And one team of researchers found that it is possible to increase happiness levels by surrounding yourself with people who are happy. Indeed, each happy individual
in your life reportedly increases your happiness by about 9 percent.

But the science of happiness is hindered by a significant measurement problem. How can we measure happiness levels accurately and then use that data to predict when and how a person
will be happy in the future?

Today we get an answer of sorts, thanks to the work of Pascal Budner and pals at the Massachusetts Institute of Technology in Cambridge. These guys have found a way to use a smart watch to measure and predict happiness.

The technology involved is a Pebble smart watch connected to an Android smartphone,
each running an app that collects and then displays data. The watch collects data such as heart rate and activity levels. The smartphone app enables users to report how happy and active they feel, via a “Happimeter” that suggests a user’s
mood and allows the individual to change it if it is wrong.

The Happimeter’s suggestions are based on psychologists’ traditional view of happiness as a parameter with two dimensions: arousal and valence. Arousal reflects readiness to
act or activity level and is associated with being more alert than usual and having a higher blood pressure or heart rate. The team measures arousal on a scale of not active, active, or very active. Valence is a measure of the user’s level of happiness:
feeling very pleasant, pleasant, or unpleasant.

That produces a two-dimensional space in which users can be in any one of nine different states. For example, being very active and feeling unpleasant is the state of being angry, whereas feeling very
pleasant and not active is the state of relaxation.

Users are prompted to choose a state four times every day,
but they can also choose to input a state at any time. In addition, the apps record external factors such as the user’s location, day of the week, time, and weather conditions.

Budner and his collaborators recruited 60 people to wear the
smart watch over a two-month period in 2017 and to enter their happiness data during this time. The participants included graduate students, researchers, faculty members, consultants, and business industry leaders, ranging in age from 22 to 59.

By the end of the experiment, the team had gathered almost 17,000 pieces of data, getting an overall picture of people’s moods. Over the course of the two months, almost 80 percent of mood inputs indicated that participants felt very pleasant,
with only 3 percent of participants feeling unpleasant. Only 16 percent felt very active, with 26 percent saying they felt not active.

There is more to be gleaned from this data. Budner and his team use a form of machine learning to find patterns in
heart rate, location, weather conditions, and so on, that can predict how happy a user will be.

The researchers claim the prediction rate is good. “We achieve prediction accuracy of up to 94 percent,” they say.

Some pieces of data
are significantly more predictive of happiness than others. “We found that weather and movement between locations are highly predictive, whereas body measures such as heart rate have lower predictive power,” say the researchers.

That suggests
that smart watch data could be hugely useful in mapping happiness in the general population. It might also help people increase their happiness levels.

Of course, there are some caveats to keep in mind. The study included only 60 people—a relatively
small number. What’s more, those people might reflect a selection bias because they were all interested in happiness research.

Budner and his colleagues are well aware of those limitations and hope to address them in the future with a bigger study
carried out with randomly selected individuals. “Nevertheless,” they say, “we think that we have introduced a novel system for tracking and increasing individual happiness.”

Aristotle would surely be thrilled.

Measuring Happiness across cultures

What is happiness? It’s one of the most basic human emotions. The pursuit of it is considered a basic human right, enshrined in the American Declaration of Independence and recognised by the UN as a “fundamental human goal.” But
what is it? And is it the same on the other side of the world?

Spoiler Alert: No, it’s not. In fact, the belief that happiness is universal is a common mistake that could impact how you market your global
business. After all, “happiness” is one of the major emotions that marketers appeal to. Here are some examples of how happiness varies across cultures, and some tips to avoid this common international marketing pitfall.

Why Happiness
Gets Lost in Translation

Why is “happiness” so hard to translate? To start, it’s more difficult than you’d think to define it, even in English. Sure, Merriam-Webster may define it as “the state of being happy.”
But if it were that easy, the self-help industry wouldn’t be raking in billions of dollars, would it? In the pop culture of the English-speaking world, it’s been described as everything from a warm puppy to a warm gun.

So, what is
happiness? Even sociologists who study happiness for a living have had trouble creating a definition that translates easily to other languages and other cultures. As the Washington
Post points out, that’s the trouble with all the studies that claim to have identified the “happiest countries,” usually Denmark. The definition of happiness may have been lost in translation:

“Some researchers say the reason is that happiness in Danish is often translated as lykke — a term that can describe a kind of everyday well-being that might be brought on by a nice cup of coffee
or a slice of bread with cheese.”

Although now that I think about it, good coffee and good cheese make me a very happy girl, and I’m not even Danish. What is happiness? Is there more to it than that? I’m not sure.

In most languages, there are a variety of possible translations for “happiness.” Each one carries its own shades of meaning, and often none of them match the English definition exactly. For example, researchers
studying happiness in China used three different words in surveys and interviews, “xingfu for a good life, you yiyi for meaning and kuaile for a good mood.”

What is Happiness? The Answer Has Changed Over Time

But even in English, the meaning of the word “happiness” has changed over time. The word hasn’t always indicated a feeling, or a goal to achieve. In fact, the Western
ideal of “happiness” as a state to be pursued is a recent invention. A research paper published in the Personality and Social Psychology Bulletin noted
that

Across cultures and time, happiness was most frequently defined as good luck and favorable external conditions. However, in American English, this definition was replaced by definitions focused on favorable internal feeling states.

So, what’s the difference? In Western, English-speaking cultures, happiness is something you chase. In many other cultures, it’s something that just comes to you. Or doesn’t. And that affects how people make decisions…including
purchasing decisions. To quote the research paper above:

In contrast, in cultures where happiness is conceived as luck and fortune, happiness might not be the conscious goal. Thus, various decisions might not be made to maximize happiness.

What is Happiness? It Depends on Culture

Additionally, activities and occasions that are considered “happy” can vary from culture to culture. The
Washington Post gives an example of an old woman in China picking out her burial clothes. She calls it “a happy thing.” Meanwhile, only the most morbid of Westerners would agree with this sentiment.

“These cultures hold the belief that especially extreme happiness leads to unhappiness and other negative consequences that outweigh the benefits of such positive feelings…People
in non-Western cultures, such as Iran and neighboring countries, worry that their peers, an “evil eye” or some other supernatural deity might resent their happiness and that they will eventually suffer any number of severe consequences.”

Understand your audience, and how they fit into the local culture. To use one of the examples above, not everyone in Iran is afraid that bad luck will strike
if they are “too happy.”

Understand the emotions you’re selling, and what provokes them in your target audience.

Sometimes, translation isn’t enough. Transcreation is often a
better option. With transcreation, marketing campaigns are reinvented to take cultural differences into account and produce a consistent emotional response.

The United Nations declared 20 March the International
Day of Happiness to recognise the relevance of happiness and well-being as universal goals. In the fifth World Report expected to be published on March 20 2017, Happiness will be measured in the Report along 8 parameters (detail at the end of the
article) and countries are ranked accordingly.

More and more Happiness is a reference for policy makers: The British prime minister, David Cameron, started in 2010 to measure his nation's happiness: “It's time we admitted that there's
more to life than money, and it's time we focused not just on GDP, but on GWB - general well-being. Well-being can't be measured by money or traded in markets. It's about the beauty of our surroundings, the quality of our culture and, above all, the strength
of our relationships. Improving our society's sense of well-being is, I believe, the central political challenge of our times.”

The first measure included in the Report is GDP per capita in terms of Purchasing Power Parity (PPP). It measures the impact that income has on Happiness. According to previous reports, people in countries with a GDP per capita of below
$6,700 were 12% less likely to report the highest level of life satisfaction than those in countries with a GDP per capita of around $20,000. Countries with GDP per capita over $20,000 see a much less obvious link between GDP and happiness. Between this level
and the very highest GDP per capita level ($54,000), the probability of reporting the highest level of life satisfaction changes by no more than 2%, and seems to be hump-shaped, with a bliss point at around $33,000. This corresponds broadly to the well-known
Easterlin Paradox – that the link between life satisfaction and GDP is more or less flat in richer countries. (See notes on source of analysis)

Money increase Happiness, if you use it wisely – 5 rules

Buy moments, not stuff. According
to Dan Gilbert, Harvard University psychology professor and author of Stumbling on Happiness, the key is to spend your
money on experiences rather than material things. Material things, even if they’re expensive or you wanted them badly, tend to lose their luster after a while, literally and figuratively. Memories of people, places and activities, however, never get
old. In a survey, Gilbert found that 57% of respondents reported greater happiness from an experiential purchase. Only 34% said the same about a material purchase.

Spend on others. In a study published this year, Harvard University researchers conducted experiments and found out that spending money on others (called “prosocial” spending in academic jargon) boosts people’s
emotional and physical well-being.“The benefits of prosocial spending… extend not only to subjective well-being but objective health,” they write. Despite people’s intuitions and inclinations to the contrary, one of the best ways to
get the biggest payoff personally from a windfall of $20 is to spend it prosocially."

Buy small splurges. Dropping a ton of cash on something extravagant doesn’t give you the same bang for your buck because, no matter how special it is at
first, you get used to having it over time and it becomes just another object. “Giving yourself inexpensive indulgences is a clever way to gather up lots of bursts of happiness,” a recent Business Insider article suggests, citing Gilbert’s research.

Buy what you like. No keeping up with the Joneses — that’s not going to make you happy. “There are a
lot of reasons someone might buy something… but if the reason is to maximize happiness, the best thing for that person to do is purchase a life experience that is in line with their personality,” Ryan Howell, an associate psychology professor
San Francisco State University, tells Forbes. Howell recently co-authored a study finding that
when people spend money just to project or uphold a certain image, it doesn't bring happiness.

Spend with others. You might think spending money on things or activities you do by yourself will make you happy, but a recent study in Psychological Science says that tactic can backfire. “To be extraordinary is to be different than other people, and social interaction is grounded in similarities,” says Gus Cooney , Harvard
University research assistant and lead author of the study. Doing things with friends or family, even if it’s not as exciting, makes you happy because it fosters a sense of togetherness and connection between you and other people. “The guy who
had the extraordinary experience had a harder time fitting in,” Cooney tells The Atlantic.

In simple terms, GDP per Capita - Gross domestic product (GDP) used in the measure of Happiness, is the monetary value of all the finished goods and services produced within a country's borders in a specific time period it is then divided by the inhabitants and adjusted by PPP.

In other words, it is the
sum of the Revenues of all companies and individuals working in a certain country. So the more the company sell the higher should be Happiness.

I ran a small test asking to 4 managers belonging to different departments and industries, if the fact that
their company was contributing to generate GDP was enough to state that their company was generating Happiness for its employees:

“No, Marco, there is no happiness at work, - Richard, a young production manager says - “I take care about
my personal happiness following the advices of Action For Happiness: I do things for others, I connect with people, I take care of my body and mind health, I
keep learning new things, I am resilient and know my direction. I accept myself, feel part of something bigger and look for what is good. With my dears, my family I feel happy. But the in the company we have always to change the goalpost of what success looks
like: we launch a product successfully that becomes the base for the next one to be even better; profitability is improved, then we have to apply “continuous improvement’ methodologies; you have done a good job, now you have to do a better
one; you hit your sales target, we're going to change it. And if happiness is on the opposite side of success, your brain never gets there. We've pushed happiness over the cognitive horizon, as a society. And that's because we think we
have to be successful, then we'll be happier” Company puts too much pressure on success.

Laura, from Marketing, sees it differently: “A company is an ideal place where to grow and nurture happiness: when a group of people is together
to pursue a common goal, if they share emotions and align their individual way of finding their personal purpose in life and how it fits to the company purpose of the company one works for. You may know that we launched a program almost 2 years ago where we
helped people to find/or define clearer their personal purpose. The feedback I got about the program and how I saw the people coming out of the program was exciting. I also think it has a lot to do with how one can grow every day and how much you are supported
in that. Balance is also important. The more you are balanced with a work you like and your private life, it helps to be happy. I personally think appreciation for what you do is very important. And it does not need a lot. And we should not forget…the
more employees are happy…the more they are engaged….and the more we succeed with our customers!!!

“I believe that happiness is mainly depending from our personal outlook on life at work, rather than from what outside circumstances
can bring us every day, add Frank of the Finance department. So for me happiness at work relies mostly on:

- Setting the right expectations (that does not prevent from being ambitious and aim for excellence and success).

- Appreciate the flow
of personal relations and challenges happening every day: the 1:1 and team meetings, the several exchanges of opinions, the decision-making moments, the lunches (we should never skip lunch or have lunch alone), the coffee breaks (you know how I loved my former
company's cafeteria...): in a nutshell, appreciate the beauty of connections and always be "in the moment".

- Stay balanced, aware of who we are and always keep our personal and professional values as a compass, particularly when the going gets tough
and the pressure (for deadlines, performance, financial results, etc.) mounts high.

I also believe that being happy is the secret for being successful in the true sense, best represented by the words of poet Maya Angelou: “success is liking who
you are, liking what you do and liking how you do it”.

“It would be great to apply the logic of the World Report and define a set of measures for Happiness ranking or rating within a company - Annette from HR Business partner team says -
I saw in a recent article by Jacob Morgan author of “The Employee Experience Advantage” on HBR that “investing in Happiness” gives high returns: it had led not only to happier employees but also to larger talent pipelines and greater
profitability and productivity. Morgan in addition found that, for instance, compared with the other companies he studied, those that invested most heavily in employee experience were included 28 times as often among Fast Company’s Most Innovative Companies,
11.5 times as often in Glassdoor’s Best Places to Work, 2.1 times as often in Forbes’s list of the World’s Most Innovative Companies, 4.4 times as often in LinkedIn’s list of North America’s Most In-Demand Employers, and twice as
often in the American Customer Satisfaction Index”.

You get what you measure – Proposing Measure of Happiness in the Company

The purpose of my recent articles on LinkedIn is to increase awareness about how Finance can contribute to
a better Society. I increased my interest on Happiness while I was reflecting on how Finance can help Society to be a better place to live and TheHappyCFO’s articles on LinkedIn shared my thoughts. The inspiration of my articles has been Shiller’s
book “Finance and the Good Society” where he writes: “What I want most for my students – near and far, young and old – to know is that finance truly has the potential to offer hope for a more fair and just world, and that their
energy and intelligence are needed to help serve this goal.”

Can Finance make it “Fair, just and happier?”

Measuring Happiness not only at Country and Society as the World report does but at a Company level could
contribute to monitor more frequently this key variable for individual and companies well being.

The
link between higher national income and higher national life satisfaction is critical to economic policymaking. This column presents new evidence that the connection is hump-shaped. There is a clear, positive relation in the poorer nations and regions, but
it flattens out at around $30,000–$35,000, and then turns negative.

Leonardo painted Happiness

The subject of centuries of scrutiny and debate: how to measure happiness solved by the genius of Leonardo. He wasn’t able to measure it but he. …painted it. Stare at Mona Lisa and mirror yourself into Happiness

Happy
people recognized Mona Lisa Happy smile

According to an article by Relax
news on Luxuo.com on Mar 19th 2017, the most famous painting by Leonardo Da Vinci Mona Lisa ‘s famous smile, routinely described as ambiguous, has been decoded by Researchers: Mona Lisa’s smile means “HAPPY”.The article refers that:
“According to an unusual trial, close to 100 per cent of people described her expression as unequivocally “happy“, researchers revealed. “We really were astonished, neuroscientist Jürgen Kornmeier of the University of Freiburg,
who co-authored the study, told AFP.”

Happiness – as defined by Wikipedia - is a mental or emotional state of well being defined
by positive or pleasant emotions ranging from contentment to intense joy. Various research groups, including positive psychology and happiness economics are employing the scientific method to
research questions about what "happiness" is, and how it might be attained and measured.

The way to measure it generated a lot of debate due to its subjective components, OECD has even issued in 2013 Guidelines that “mark an important turning point in our knowledge of how subjective wellbeing (happiness) can, and should, be measured. Not long ago, the received wisdom was that “we don’t know enough” about
subjective well being to build it into measures of societal progress. However, as the evidence documented in these Guidelines shows, we in fact know a lot – perhaps more than we realised until we gathered all the relevant material for this report –
and in particular that measures of subjective well-being are capable of capturing valid and meaningful information. (..) Subjective well-being data can provide an important complement to other indicators already used for monitoring and benchmarking countries
performance, for guiding people’s choices, and for designing and delivering policies. Measures of subjective well being show meaningful associations with a range of life circumstances, including the other dimensions of well being explored in the Better
Life Initiative. However, because a variety of factors affect how people experience and report on their lives, including factors such as psychological resilience in the face of adversity, and potential cultural and linguistic influences that are not currently
well-understood, subjective well-being can only tell part of a person’s story”

Let’s go back to Leonardo, despite being unaware of this complexity, he was able to paint Happiness in Mona Lisa smile so when we stare at
Mona Lisa we perceive what well being (Happiness) is.The article explains “Kornmeier and a team used what is arguably the most famous art piece in the world in a study of factors that influence how humans judge visual cues such as facial expressions.
Mona Lisa is often held up as a symbol of emotional enigma. The portrait appears to many to be smiling sweetly at first, only to adopt a mocking sneer or sad stare the longer you look. Using a black and white copy of the early 16th century masterpiece, a team
manipulated the model’s mouth corners slightly up and down to create eight altered images — four marginally but progressively “happier” and four “sadder” Mona Lisa’s. A block of nine images was shown to 12 trial participants
30 times. In every showing, for which the pictures were randomly reshuffled, participants had to describe each of the nine images as happy or sad.The findings confirm that “we do not have an absolute fixed scale of happiness and sadness in our brain”
and that a lot depends on context, the researcher explained. “Our brain manages to very, very quickly scan the field. We notice the total range, and then we adapt our estimates” using our memory of previous sensory experiences, he said.Another
interesting discovery was that people were quicker to identify happier Mona Lisas than sad ones. This suggested “there may be a slight preference …in human beings for happiness” said Kornmeier.

How
Happiness is measured at Country level

While the brain can hardly recognize and quantify someone else’s happiness, socio economists try to measure it every year, gathering different data to be shared in the annual report that aims to measure the level of Happiness for almost 200 countries. They utilize 8 criteria -objectives and subjectives-: The first one, most commonly utilized in many economic measures is GDP per capita -
adjusted in terms of Purchasing Power Parity (PPP) - measures the impact that income has on Happiness. Based on past analysis, Income variation contributes to 2% of total Happiness variation across countries. Above a certain threshold of Income per capita
(above 35/40K$) happiness does not grow linearly. The time series of healthy life expectancy at birth measure the important element of physical health. A third element is Social support (or having someone to count
on in times of trouble), then Freedom to make life choices is a powerful motivator of internal wellness, Generosity – “Have you donated money to a charity in the past month?” on GDP per capita. Finally Perceptions
of corruption reduce Happiness status. Positive affect is defined as the average of previous-day affect measures for happiness, laughter and enjoyment and Negative affect is defined as the average of previous-day
affect measures for worry, sadness and anger.

In the 2017 Report, all of the top four countries rank highly on all the main factors found to support happiness: caring,
freedom, generosity, honesty, health, income and good governance. Their averages are so close that small changes can re-order the rankings from year to year. Norway moves to the top of the ranking despite weaker oil prices hitting GDP. It is sometimes said
that Norway achieves and maintains its high happiness not because of its oil wealth, but in spite of it. By choosing to produce its oil slowly, and investing the proceeds for the future rather than spending them in the present, Norway has insulated itself
from the boom and bust cycle of many other resource-rich economies. To do this successfully requires high levels of mutual trust, shared purpose, generosity and good governance, all factors that help to keep Norway and other top countries where they are in
the happiness rankings. All of the other countries in the top ten also have high values in all six of the key variables used to explain happiness differences among countries and through time—income, healthy life expectancy, having someone to count on
in times of trouble, generosity, freedom and trust, with the latter measured by the absence of corruption in business and government.

Measuring Happiness when listening the web

A company, believes that
the subjective method to measure Happiness is the most reliable and “reading people’s feelings via listening to their messages on Twitter is better then asking them if they feel Happy” as done in the Happiness Report. They propose a quicker
methodology to measure in real time the level of Happiness in a certain area. It is based on iSA (integrated sentiment analysis), a novel algorithm designed for social networks and Web 2.0 sphere (Twitter, blogs, etc.) opinion analysis, i.e. developed
for the digital environments characterized by abundance of noise compared to the amount of information. Instead of performing an individual classification and then aggregate the predicted values, iSA directly estimates the aggregated distribution of opinions.
Through empirical analysis it was demonstrated that iSA outperforms machine-learning techniques of individual classification (e.g. SVM, Random Forests, etc.) as well as the only other alternative for aggregated sentiment analysis known as ReadMe.

Voices routinely produces based on the algorithm daily statistics about the level of Happiness in Italian cities, showing trends, normal distribution. I checked its validity, too: when Pope Francisco visited Milan last week all indicators on Twitter
were on HAPPY!

What Happiness is not: Misery

As it is difficult to measure Happiness, the Economist in a recently published study, referring and leveraging the annual publication of the World Happiness report,
tries to unpick what make people happy and sad. It is not easy according to it to measure happiness but we know what make people sad: Mental illness, Unemployment, Poverty, Being without a partner, Being uneducated or physical ill. Some of it can be measured
and in the article various rankings and comparisons are made.

Can Artificial Intelligence measure Happiness?

In an interesting
very recent podcast HR Happy Hour 279 - Artificial Intelligence for HR and for People (Listen HERE) Steve Boese and special guest co-host Madeline Laurano recorded a special Happy Hour Show live from Ultimate
Connections 2017 in Las Vegas. They were joined by Ultimate Software's Cecile Alper-Leroux and Armen Berjikly to talk about the need to listen to the 'Voice of the Employee', the importance of technology to help HR leaders understand data, (especially
unstructured data), and how modern technology solutions can help HR leaders move from just listening, to understanding, and finally, to taking actions, (and recommending actions). With a similar logic of Voices, they feel that getting data via AI is better
then simply asking people how they feel.

The theme for the Ultimate Connections Conference was 'Elevate' - and the key idea to how HR and business leaders can elevate the employee experience by listening to their needs more closely, applying
new technologies that can help analyze data from employee surveys and other disparate sources for things like sentiment and tone, and finally using those insights to take actions that can improve the organization and the individual employee experience. Technology
can help measure in real time Happiness levels.

An ambitious European Union Project can help to gather data on Company Happiness (well being)

The European Union has approved a Directive on disclosure of non-financial
and diversity information (2014/95/EU) entered into force in December 2014. This ambitious legislation requires around 6,000 large companies listed on EU markets, or operating in the banking and insurance sectors, to disclose relevant environmental and social
information in the management report, with the first reports to be published in 2018 (on financial year 2017).

The Directive requires the Commission to prepare non-binding guidelines to be published as soon as possible in the spring 2017.

Financial and non-financial reporting provides shareholders and other stakeholders with a meaningful, comprehensive view of the position and performance of companies.

Large public-interest entities (listed companies, banks, insurance
undertakings and other companies that are so designated by Member States) with more than 500 employees should disclose in their management report relevant and useful information on their policies, main risks and outcomes relating to at least environmental
matters, social and employee aspects, respect for human rights, anticorruption and bribery issues, and diversity in their board of directors.

There is significant flexibility for companies to disclose relevant information
(including reporting in a separate report), as well as they may rely on international, European or national guidelines (e.g. the UN Global Compact, the OECD Guidelines for Multinational Enterprises, ISO 26000, etc.).

How
Finance can contribute to measure?

The purpose of my recent articles on LinkedIn is to increase
awareness about how Finance can contribute to a betterSociety, taking inspiration from Robert J. Shiller: “Finance truly has the potential to offer hope for a more fair and just - and Happy, I add, - world”

Companies are a team or group of individuals with a common goal. The level of Happiness of that team is influenced by how “hard measurable objectives” are achieved and how is the culture/spirit of the team. The Objective and Subjective
elements contribute to the level of Happiness, even though it is not defined in this way. Normally companies refer to a so-called “level of engagement” that is a proxy of Happiness. So Companies are not far from being able to measure how much people
are Happy to work there and being part of a wider Society, a Company could also try to measure how it contribute to the overall Happiness. The EU Directive it is an important incentive to do so.

In the next article I will share how companies
are preparing to measure their impact and how much they are willing to embark in measuring Happiness.

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